The U.S. Securities and Exchange Commission (SEC) has officially brought its prolonged legal battle with enterprise blockchain company Ripple to a close, a resolution that coincides with a significant waiver removing Ripple's "bad actor" disqualification. This waiver, issued by the SEC, substantially simplifies private fundraising for Ripple, allowing it to leverage Rule 506 exemptions under Regulation D. Typically, a company deemed a "bad actor" due to securities law violations is barred from using these exemptions, which facilitate securing unlimited funds from accredited investors without the need for a cumbersome and time-consuming SEC registration process. Startups, particularly in the cryptocurrency sector, often utilize this method for pre-IPO fundraising to save time and legal costs. The permanent injunction previously imposed on Ripple by Judge Analisa Torres had effectively blocked this crucial fundraising avenue for five years; however, the SEC's recent waiver bypasses this significant roadblock.

This long-awaited resolution marks the end of a four-year legal saga that began in December 2020. Under the leadership of former Chair Jay Clayton, the SEC initiated the lawsuit, accusing Ripple, its CEO Brad Garlinghouse, and Chairman Chris Larsen of selling unregistered securities. Despite initial hopes from the crypto community that Chair Gary Gensler, seen as crypto-savvy, might alter the agency's stance, his SEC doubled down on regulation by enforcement. After numerous twists and turns, District Judge Analisa Torres ruled in July 2023 that secondary XRP sales were not securities. In August 2024, Judge Torres issued a final judgment, imposing a $125 million fine on Ripple and a permanent injunction preventing the company from selling XRP tokens to institutions in the U.S. The saga appeared to conclude, but Gensler's SEC filed an appeal in October, followed by Ripple's cross-appeal.

Following Gensler's departure in January, Ripple and the SEC reached a settlement agreement aimed at reducing the penalty and removing the injunction. However, Judge Torres refused to modify the final ruling. Consequently, Ripple withdrew its cross-appeal, and the SEC reciprocated earlier in August 2025, thereby officially concluding the arduous legal confrontation. SEC Chair Paul Atkins, a pro-cryptocurrency libertarian, commented that "With this chapter closed, we now have an opportunity to shift our energy from the courtroom to the policy drafting table." Commissioner Hester Peirce echoed this sentiment, stressing that the agency, now free from litigation, can concentrate on creating a clear regulatory framework for crypto.

Ripple officials have reacted to the developments. David Schwartz, Ripple's Chief Technology Officer, shared a humorous British comedy sketch quote on social media in response to the SEC officials' post-lawsuit statements, signaling the relief of the battle being "laid to rest." Stuart Alderoty, Ripple's Chief Legal Officer, publicly thanked Chair Atkins for "moving America towards clear rules of the road." Despite these optimistic remarks from SEC and Ripple executives, the XRP price experienced a counterintuitive downturn. After an initial news-driven surge following the resolution, XRP plunged by 4%, underperforming most major altcoins. Currently, XRP is trading at $3.15, according to CoinGecko data, leaving some observers questioning the market's response to such significant positive news.